The Bank of Israel has cut its 2016 growth forecast from 2.8% to 2.4%.
The Bank of IsraelMonetary Committee, headed by Governor Karnit Flug, has kept the interest rate for July unchanged at 0.1%. The interest rate has been unchanged since it was cut to a historic low of 0.1% in March 2015.
The interest rate decision was expected but what did comes as a surprise was that the Bank of Israel cut its growth forecast for 2016 and 2017. The Bank of Israel cut its 2016 growth forecast from 2.8% to 2.4% and its 2017 growth forecast from 3% to 2.9%.
The Bank of Israel says that in light of inflation returning to the 1-3% target range, it expects to raise the interest rate to 0.25% at the end of 2017.
Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2016
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Karnit Flug